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Changes to quarantine rules open Chinese dairy market to Australian producers -

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CHRIS UHLMANN: China is the world's biggest importer of dairy products and now Australian dairy producers have a shot at a larger slice of the market.

Changes to quarantine rules means it now takes just seven days for fresh Australian milk to reach the shelves of Chinese supermarkets.

Once a delivery of milk to our largest trading partner took up to three weeks.

Huey Fern Tay reports from Nanjing.

(Sound of traffic noise and car radio)

HUEY FERN TAY: A van carrying fresh milk from Australia is weaving through the streets of Nanjing, a city in China's south east.

(Sound of door opening and closing)

We watch as the milk is delivered to a Chinese supermarket. It's taken only seven days to arrive from Australia.

This wouldn't have been possible before because of lengthy Chinese quarantine procedures.

But in April this year, a channel was opened to fast track shipments of delicate cargo like this.

Peter Verry runs the Sydney company behind the initiative, Peloris Global Sourcing.

PETER VERRY: Commercial shipments started about just over a month ago and in that time we've done approximately 20,000 litres.

HUEY FERN TAY: Peter Verry and his business partners have big plans for the weeks and months ahead.

By the end of the year they hope to bring in 1 million litres of milk a month - and they say that's just the beginning.

PETER VERRY: We think that's actually a conservative number and we are working closely with Qantas and our partners to ensure we've got the infrastructure in place.

HUEY FERN TAY: The milk is expensive in China - just like most imported goods.

Only a select group of people can afford to pay $9.50 a litre for this premium product.

It's four and a half times the price of milk produced by a Chinese company. Yet demand is strong because many people still don't trust local dairy companies, even though it's been six years since the melamine infant milk scandal.

It affected hundreds of thousands of people and six children were killed.

Zheng Fengtian is a university professor who was one of many alarmed Chinese parents who opted to buy imported infant milk formula for his child.

"The entire dairy industry is very complicated," he says. "There are so many farm owners, the supply chain is so long, there are so many companies involved. So even though the Chinese government has put in a lot of effort to improve the standard of the dairy industry, but it's not something that can be solved in a day or two," he says.

Now that more Chinese families have the option of having a second child, the market for milk products will become even greater.

This is Huey Fern Tay in Nanjing for AM.